Bill Text: IL HB3661 | 2009-2010 | 96th General Assembly | Engrossed

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Bill Title: Amends the Downstate Teacher Article of the Illinois Pension Code. Allows a teacher to establish service credit for service in an amount not greater than 5 years for employment by the New York School for the Deaf if such employment occurred before January 1, 1975. Requires payment of employee and employer contributions, plus interest.

Sponsorship: Partisan Bill (Republican 1)

Status: (Engrossed - Dead) 2009-05-08 - Rule 3-9(a) / Re-referred to Assignments [HB3661 Detail]

Download: Illinois-2009-HB3661-Engrossed.html

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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Sections 16-127 and 16-128 and by adding Section 16-203.1 as
follows:
(40 ILCS 5/16-127) (from Ch. 108 1/2, par. 16-127)
Sec. 16-127. Computation of creditable service.
(a) Each member shall receive regular credit for all
service as a teacher from the date membership begins, for which
satisfactory evidence is supplied and all contributions have
been paid.
(b) The following periods of service shall earn optional
credit and each member shall receive credit for all such
service for which satisfactory evidence is supplied and all
contributions have been paid as of the date specified:
(1) Prior service as a teacher.
(2) Service in a capacity essentially similar or
equivalent to that of a teacher, in the public common
schools in school districts in this State not included
within the provisions of this System, or of any other
State, territory, dependency or possession of the United
States, or in schools operated by or under the auspices of

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the United States, or under the auspices of any agency or
department of any other State, and service during any
period of professional speech correction or special
education experience for a public agency within this State
or any other State, territory, dependency or possession of
the United States, and service prior to February 1, 1951 as
a recreation worker for the Illinois Department of Public
Safety, for a period not exceeding the lesser of 2/5 of the
total creditable service of the member or 10 years. The
maximum service of 10 years which is allowable under this
paragraph shall be reduced by the service credit which is
validated by other retirement systems under paragraph (i)
of Section 15-113 and paragraph 1 of Section 17-133. Credit
granted under this paragraph may not be used in
determination of a retirement annuity or disability
benefits unless the member has at least 5 years of
creditable service earned subsequent to this employment
with one or more of the following systems: Teachers'
Retirement System of the State of Illinois, State
Universities Retirement System, and the Public School
Teachers' Pension and Retirement Fund of Chicago. Whenever
such service credit exceeds the maximum allowed for all
purposes of this Article, the first service rendered in
point of time shall be considered. The changes to this
subdivision (b)(2) made by Public Act 86-272 shall apply
not only to persons who on or after its effective date

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(August 23, 1989) are in service as a teacher under the
System, but also to persons whose status as such a teacher
terminated prior to such effective date, whether or not
such person is an annuitant on that date.
(3) Any periods immediately following teaching
service, under this System or under Article 17, (or
immediately following service prior to February 1, 1951 as
a recreation worker for the Illinois Department of Public
Safety) spent in active service with the military forces of
the United States; periods spent in educational programs
that prepare for return to teaching sponsored by the
federal government following such active military service;
if a teacher returns to teaching service within one
calendar year after discharge or after the completion of
the educational program, a further period, not exceeding
one calendar year, between time spent in military service
or in such educational programs and the return to
employment as a teacher under this System; and a period of
up to 2 years of active military service not immediately
following employment as a teacher.
The changes to this Section and Section 16-128 relating
to military service made by P.A. 87-794 shall apply not
only to persons who on or after its effective date are in
service as a teacher under the System, but also to persons
whose status as a teacher terminated prior to that date,
whether or not the person is an annuitant on that date. In

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the case of an annuitant who applies for credit allowable
under this Section for a period of military service that
did not immediately follow employment, and who has made the
required contributions for such credit, the annuity shall
be recalculated to include the additional service credit,
with the increase taking effect on the date the System
received written notification of the annuitant's intent to
purchase the credit, if payment of all the required
contributions is made within 60 days of such notice, or
else on the first annuity payment date following the date
of payment of the required contributions. In calculating
the automatic annual increase for an annuity that has been
recalculated under this Section, the increase attributable
to the additional service allowable under P.A. 87-794 shall
be included in the calculation of automatic annual
increases accruing after the effective date of the
recalculation.
Credit for military service shall be determined as
follows: if entry occurs during the months of July, August,
or September and the member was a teacher at the end of the
immediately preceding school term, credit shall be granted
from July 1 of the year in which he or she entered service;
if entry occurs during the school term and the teacher was
in teaching service at the beginning of the school term,
credit shall be granted from July 1 of such year. In all
other cases where credit for military service is allowed,

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credit shall be granted from the date of entry into the
service.
The total period of military service for which credit
is granted shall not exceed 5 years for any member unless
the service: (A) is validated before July 1, 1964, and (B)
does not extend beyond July 1, 1963. Credit for military
service shall be granted under this Section only if not
more than 5 years of the military service for which credit
is granted under this Section is used by the member to
qualify for a military retirement allotment from any branch
of the armed forces of the United States. The changes to
this subdivision (b)(3) made by Public Act 86-272 shall
apply not only to persons who on or after its effective
date (August 23, 1989) are in service as a teacher under
the System, but also to persons whose status as such a
teacher terminated prior to such effective date, whether or
not such person is an annuitant on that date.
(4) Any periods served as a member of the General
Assembly.
(5)(i) Any periods for which a teacher, as defined in
Section 16-106, is granted a leave of absence, provided he
or she returns to teaching service creditable under this
System or the State Universities Retirement System
following the leave; (ii) periods during which a teacher is
involuntarily laid off from teaching, provided he or she
returns to teaching following the lay-off; (iii) periods

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prior to July 1, 1983 during which a teacher ceased covered
employment due to pregnancy, provided that the teacher
returned to teaching service creditable under this System
or the State Universities Retirement System following the
pregnancy and submits evidence satisfactory to the Board
documenting that the employment ceased due to pregnancy;
and (iv) periods prior to July 1, 1983 during which a
teacher ceased covered employment for the purpose of
adopting an infant under 3 years of age or caring for a
newly adopted infant under 3 years of age, provided that
the teacher returned to teaching service creditable under
this System or the State Universities Retirement System
following the adoption and submits evidence satisfactory
to the Board documenting that the employment ceased for the
purpose of adopting an infant under 3 years of age or
caring for a newly adopted infant under 3 years of age.
However, total credit under this paragraph (5) may not
exceed 3 years.
Any qualified member or annuitant may apply for credit
under item (iii) or (iv) of this paragraph (5) without
regard to whether service was terminated before the
effective date of this amendatory Act of 1997. In the case
of an annuitant who establishes credit under item (iii) or
(iv), the annuity shall be recalculated to include the
additional service credit. The increase in annuity shall
take effect on the date the System receives written

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notification of the annuitant's intent to purchase the
credit, if the required evidence is submitted and the
required contribution paid within 60 days of that
notification, otherwise on the first annuity payment date
following the System's receipt of the required evidence and
contribution. The increase in an annuity recalculated
under this provision shall be included in the calculation
of automatic annual increases in the annuity accruing after
the effective date of the recalculation.
Optional credit may be purchased under this subsection
(b)(5) for periods during which a teacher has been granted
a leave of absence pursuant to Section 24-13 of the School
Code. A teacher whose service under this Article terminated
prior to the effective date of P.A. 86-1488 shall be
eligible to purchase such optional credit. If a teacher who
purchases this optional credit is already receiving a
retirement annuity under this Article, the annuity shall be
recalculated as if the annuitant had applied for the leave
of absence credit at the time of retirement. The difference
between the entitled annuity and the actual annuity shall
be credited to the purchase of the optional credit. The
remainder of the purchase cost of the optional credit shall
be paid on or before April 1, 1992.
The change in this paragraph made by Public Act 86-273
shall be applicable to teachers who retire after June 1,
1989, as well as to teachers who are in service on that

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date.
(6) Any days of unused and uncompensated accumulated
sick leave earned by a teacher. The service credit granted
under this paragraph shall be the ratio of the number of
unused and uncompensated accumulated sick leave days to 170
days, subject to a maximum of 2 years of service credit.
Prior to the member's retirement, each former employer
shall certify to the System the number of unused and
uncompensated accumulated sick leave days credited to the
member at the time of termination of service. The period of
unused sick leave shall not be considered in determining
the effective date of retirement. A member is not required
to make contributions in order to obtain service credit for
unused sick leave.
Credit for sick leave shall, at retirement, be granted
by the System for any retiring regional or assistant
regional superintendent of schools at the rate of 6 days
per year of creditable service or portion thereof
established while serving as such superintendent or
assistant superintendent.
(7) Periods prior to February 1, 1987 served as an
employee of the Illinois Mathematics and Science Academy
for which credit has not been terminated under Section
15-113.9 of this Code.
(8) Service as a substitute teacher for work performed
prior to July 1, 1990.

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(9) Service as a part-time teacher for work performed
prior to July 1, 1990.
(10) Up to 2 years of employment with Southern Illinois
University - Carbondale from September 1, 1959 to August
31, 1961, or with Governors State University from September
1, 1972 to August 31, 1974, for which the teacher has no
credit under Article 15. To receive credit under this item
(10), a teacher must apply in writing to the Board and pay
the required contributions before May 1, 1993 and have at
least 12 years of service credit under this Article.
(11) Service in an amount not greater than 2 years for
employment by the New York School for the Deaf, a public
entity under the New York State Education Department, if
such employment occurred before January 1, 1975, the member
applies within 12 months after the effective date of this
amendatory Act of the 96th General Assembly, and the
contributions required under subsection (f) of Section
16-128 of this Code are made. The member shall be eligible
for service credit under this item (11) regardless of
whether the specified employment required a teaching
certificate. If credit for any portion of that service is
validated by any other retirement system operated under the
auspices of any agency or department of any other state,
then credit for that service shall be reduced
proportionately under this item (11).
(b-1) A member may establish optional credit for up to 2

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years of service as a teacher or administrator employed by a
private school recognized by the Illinois State Board of
Education, provided that the teacher (i) was certified under
the law governing the certification of teachers at the time the
service was rendered, (ii) applies in writing on or after June
1, 2002 and on or before June 1, 2005, (iii) supplies
satisfactory evidence of the employment, (iv) completes at
least 10 years of contributing service as a teacher as defined
in Section 16-106, and (v) pays the contribution required in
subsection (d-5) of Section 16-128. The member may apply for
credit under this subsection and pay the required contribution
before completing the 10 years of contributing service required
under item (iv), but the credit may not be used until the item
(iv) contributing service requirement has been met.
(c) The service credits specified in this Section shall be
granted only if: (1) such service credits are not used for
credit in any other statutory tax-supported public employee
retirement system other than the federal Social Security
program; and (2) the member makes the required contributions as
specified in Section 16-128. Except as provided in subsection
(b-1) of this Section, the service credit shall be effective as
of the date the required contributions are completed.
Any service credits granted under this Section shall
terminate upon cessation of membership for any cause.
Credit may not be granted under this Section covering any
period for which an age retirement or disability retirement

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allowance has been paid.
(Source: P.A. 92-867, eff. 1-3-03.)
(40 ILCS 5/16-128) (from Ch. 108 1/2, par. 16-128)
Sec. 16-128. Creditable service - required contributions.
(a) In order to receive the creditable service specified
under subsection (b) of Section 16-127, a member is required to
make the following contributions: (i) an amount equal to the
contributions which would have been required had such service
been rendered as a member under this System; (ii) for military
service not immediately following employment and for service
established under subdivision (b)(10) of Section 16-127, an
amount determined by the Board to be equal to the employer's
normal cost of the benefits accrued for such service; and (iii)
interest from the date the contributions would have been due
(or, in the case of a person establishing credit for military
service under subdivision (b)(3) of Section 16-127, the date of
first membership in the System, if that date is later) to the
date of payment, at the following rate of interest, compounded
annually: for periods prior to July 1, 1965, regular interest;
from July 1, 1965 to June 30, 1977, 4% per year; on and after
July 1, 1977, regular interest.
(b) In order to receive creditable service under paragraph
(2) of subsection (b) of Section 16-127 for those who were not
members on June 30, 1963, the minimum required contribution
shall be $420 per year of service together with interest at 4%

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per year compounded annually from July 1, preceding the date of
membership until June 30, 1977 and at regular interest
compounded annually thereafter to the date of payment.
(c) In determining the contribution required in order to
receive creditable service under paragraph (3) of subsection
(b) of Section 16-127, the salary rate for the remainder of the
school term in which a member enters military service shall be
assumed to be equal to the member's salary rate at the time of
entering military service. However, for military service not
immediately following employment, the salary rate on the last
date as a participating teacher prior to such military service,
or on the first date as a participating teacher after such
military service, whichever is greater, shall be assumed to be
equal to the member's salary rate at the time of entering
military service. For each school term thereafter, the member's
salary rate shall be assumed to be 5% higher than the salary
rate in the previous school term.
(d) In determining the contribution required in order to
receive creditable service under paragraph (5) of subsection
(b) of Section 16-127, a member's salary rate during the period
for which credit is being established shall be assumed to be
equal to the member's last salary rate immediately preceding
that period.
(d-5) For each year of service credit to be established
under subsection (b-1) of Section 16-127, a member is required
to contribute to the System (i) 16.5% of the annual salary rate

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during the first year of full-time employment as a teacher
under this Article following the private school service, plus
(ii) interest thereon from the date of first full-time
employment as a teacher under this Article following the
private school service to the date of payment, compounded
annually, at the rate of 8.5% per year for periods before the
effective date of this amendatory Act of the 92nd General
Assembly, and for subsequent periods at a rate equal to the
System's actuarially assumed rate of return on investments.
(d-10) For service credit established under paragraph (6)
of subsection (b) of Section 16-127 for days granted by an
employer in excess of the member's normal annual sick leave
allotment, the employer is required to pay the normal cost of
benefits based upon such service credit. This subsection (d-10)
does not apply to sick leave granted to teachers under
contracts or collective bargaining agreements entered into,
amended, or renewed before June 1, 2005 (the effective date of
Public Act 94-4). The employer contributions required under
this subsection (d-10) shall be paid in the form of a lump sum
within 30 days after receipt of the bill after the teacher
begins receiving benefits under this Article.
(e) Except for contributions under subsection (d-10), the
contributions required under this Section may be made from the
date the statement for such creditable service is issued until
retirement date. All such required contributions must be made
before any retirement annuity is granted.

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(f) For each year of service credit to be established under
item (11) of subsection (b) of Section 16-127, a member is
required to contribute to the System an amount equal to (i) the
employee contributions that would have been required by the
member if the service had been earned as a teacher under the
System, plus (ii) the employer's normal cost of the benefit had
the service been earned as a teacher under the System, plus
(iii) interest on items (i) and (ii) at the actuarially assumed
rate from the date of first employment as a teacher under this
Article following the date the specified out-of-state
employment occurred to the date of payment, compounded
annually.
(Source: P.A. 94-4, eff. 6-1-05; 94-1057, eff. 7-31-06.)
(40 ILCS 5/16-203.1 new)
Sec. 16-203.1. New benefit increases. The General Assembly
finds and declares that the amendment to Section 16-127 made by
this amendatory Act of the 96th General Assembly that allows
members to establish service credit for employment by the New
York School for the Deaf constitutes a new benefit increase
within the meaning of Section 16-203. Funding for this new
benefit increase will be provided by additional employee
contributions under subsection (f) of Section 16-128. In
accordance with subsection (d) of Section 16-203, this new
benefit increase shall expire 5 years after the effective date
of this amendatory Act of the 96th General Assembly.